Should You Be Pleased About The CEO Pay At American Airlines Group Inc’s (NASDAQ:AAL)
In 2013 Doug Parker was appointed CEO of American Airlines Group Inc (NASDAQ:AAL). This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for American Airlines Group
How Does Doug Parker’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that American Airlines Group Inc has a market cap of US$17b, and is paying total annual CEO compensation of US$12m. We note that’s an increase of 9.3% above last year. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m.
That means Doug Parker receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at American Airlines Group has changed over time.
Is American Airlines Group Inc Growing?
Over the last three years American Airlines Group Inc has shrunk its earnings per share by an average of 46% per year. In the last year, its revenue is up 4.8%.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has American Airlines Group Inc Been A Good Investment?
Given the total loss of 9.7% over three years, many shareholders in American Airlines Group Inc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
Remuneration for Doug Parker is close enough to the median pay for a CEO of a large company .
Returns have been disappointing and the company is not growing its earnings per share. This doesn’t look great when you consider CEO remuneration is up on last year. Few would argue that it’s wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling American Airlines Group Inc (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
